IRS Form 8936 for Clean Vehicle Credit - Schedule K-1 from Partnership Investment

In this example, we have a taxpayer who receives an allocation of the Clean Vehicle Credit on a Schedule K-1 from his investment in a partnership.
In order to claim the clean vehicle tax credit allocation, the taxpayer must consider the following issues:
1. Does the taxpayer's AGI fall within the AGI thresholds for the year?
2. Is the investment a nonpassive or passive activity? If a passive activity, you must use Form 8582-CR to calculate passive activity credit limitations.
3. Does the taxpayer have sufficient tax liability to claim the nonrefundable general business tax credits (IRS Form 3800)
In general, the Clean Vehicle Credit is available for individuals or businesses that meet the following requirements for 2023:
1. The Vehicle must be new (exceptions apply for qualified used vehicles).
2. The vehicle must be propelled by an electric motor that draws electricity from a battery, and the battery is recharged by an external power source.
3. The gross vehicle weight must be less than 14,000 pounds.
4. The vehicle's final assembly occurred in North America.
5. MSRP is not more than $50,000 ($80k applies to vans & SUVs).
The available tax credit is a maximum of $7,500 per vehicle. In order to get the full $7,500, the vehicle must meet both the critical mineral requirement and battery component requirement. If the vehicle only meets one of the tests, it is only eligible for a $3,750 tax credit.
If you have doubts about whether the vehicle qualifies, you can check the following websites to look up the year, make & model.
FuelEconomy: fueleconomy.go...
IRS Website: www.irs.gov/cr...
For more videos on energy tax credits:
• Energy Efficient Credi...
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